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Why New Zealand's export games industry needs help

New Zealand’s games industry creates the exports and well-paid jobs that make government eyes light up.

To date the sector has outperformed almost everyone else. Sales double roughly every two years.

Selling photons around the world earns $20 overseas for every dollar made at home.

Last year the industry earned $323.9 million.

Now all that is at risk.

Australian land grab

Australia plans to hand video games companies a 30 to 40 per cent tax incentive.

That, says the local industry, will trigger a brain drain across the Tasman. Investment will follow in its wake.

You could view it as a land grab.

Chelsea Rapp, who chairs the New Zealand Game Developers Association says: “Any chance we had of attracting overseas studios to set up shop in New Zealand ends in 2022, and some New Zealand studios are already looking at expanding into Australia instead of expanding locally.”

The Australian government scheme gives game developers a 30 per cent refundable tax offset for production from 2022.

On top of the federal money, several Australian states have their own offers which could add a further 10 per cent to the lure.

There’s a suitable vehicle

It’s common when stories like this emerge that the local industry body calls on our government to match the Australian incentives.

Yet, there is a New Zealand scheme in place that is similar to the new Australian one.

The New Zealand Screen Production Grant hands out similar sums of money to film and TV companies planning to shoot here. Most of this goes to overseas companies who move here for a while, then pack up and leave at the end.

Games companies are not able to get this grant.

Here for the longer term

The NZGDA points out that games companies are not likely to pull out immediately after completing a new production. Instead they hang around and start again, either on a sequel or a new project.

In other words, pouring money into the games sector keeps jobs and investment ticking over.

There are arguments that governments should not subsidise industries. And there is always a risk of a race to the bottom with Australia.

Almost everyone in business can make an argument why their needs deserve support.

Yet in this case the subsidies and race to a bottom risk are already in place. At least for the film sector. It doesn’t make sense to exclude the games market.

What’s more, the games industry often interacts with and swaps skills and personnel other high tech sectors. Keeping it here in New Zealand will benefit the entire home grown technology scene.